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WASHINGTON, Nov. 26, 2004  Money contained within the 2005 National Defense Authorization Act will fund a 3.5 percent troop pay raise and eliminate servicemembers' out-of-pocket costs for family housing, DoD's top military personnel official noted.

The January troop pay raise will be applied across the board to all servicemembers and won't feature pay hikes targeted to specific ranks as in past years, David S. C. Chu, the undersecretary of defense for personnel and readiness, said during a recent Pentagon interview.

The targeted raises issued to mid-level officers and noncommissioned officers over the past two years, Chu explained, "have fixed," for now, most pay- disparity issues involving those ranks.

And, he noted, money is contained in the 2005 act to boost allowances that now eliminate servicemembers' out-of-pocket expenses used for on- or off-post family housing. Stateside and overseas family housing allowances are calculated according to regional markets.

Another provision in the 2005 NDAA removes a previously established ceiling limiting how much military family-housing inventory could be privatized, Chu said.

Privatization enables DoD to modernize its military family housing more quickly and efficiently, Chu said. About one-third of military families live in on-post housing.

If DoD funded all of its existing family-housing needs by itself, Chu explained, it would take the department "forever" to make needed repairs or to replace aging housing units largely built in the 1950s.

Chu pointed to privatization success stories, such as contractor-provided housing for soldiers and their families at Fort Carson, Colo. Such private sector-provided housing offers contemporary quality and "design flair" for servicemembers while providing more bang for the buck for taxpayers.

The act also contains three special pay and bonus authorities, Chu noted. For example, the bill makes permanent the increase to military family separation pay to $250 a month and likewise hostile fire/imminent danger pay at $225 a month.

The bill also provides "a much stronger set" of re-enlistment bonuses for Guard and Reserve members.

Chu said the '05 NDAA ensures that troops in the field receive the equipment and other material they require to successfully prosecute the global war against terrorism.

The bill also provides extended health coverage for some reservists, Chu noted, as well as better Montgomery G.I. Bill benefits.

Another change contained in the '05 NDAA enables reservists to be called up for training before possible overseas deployment. This, Chu pointed out, is a more efficient means of force management.

A major highlight of military personnel management during his tenure, Chu observed, involves successive increases in troop compensation.

"The president has been willing to carry the torch for us to argue for significant pay increases," Chu noted, as well as to reduce and eventually eliminate servicemembers' out-of-pockets costs for military housing.